Differences between subsidiary liability of the founder and joint and several liability

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Joint and several liability of the founder of a limited liability company is related to his share in the authorized capital and is determined proportionally to it. All shareholders share the losses incurred according to their share participation. At the same time, the board has the right to decide to impose additional obligations on them.

Let us consider situations where joint and several liability, rather than subsidiary liability, of the founder of an institution or commercial organization occurs:

failure to fulfill obligations related to the establishment of a company that arose prior to its establishment and registration with the tax authorities;

failure of a shareholder to pay his share in the authorized capital. In such a case, he can be held jointly liable and required to contribute the agreed portion of the funds.

In turn, subsidiary liability latvia email list arises when the main debtor is unable to cover the obligations or the organization has been excluded from the Unified State Register of Legal Entities. In such cases, the creditor must first demand repayment from the borrower. If the latter is unable to pay the debt, liability passes to the subsidiary participants.

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When does subsidiary liability of founders and directors arise?
The connection with the bankruptcy process of the enterprise can be established on the basis of existing contracts and acts of performance of work or provision of services, facts of payment under contracts, minutes of meetings where decisions were made to issue relevant orders.

The law provides that subsidiary liability of the founder and manager occurs if there is evidence that:

the agreements executed resulted in losses, for example, raw materials were purchased for 100 thousand rubles, which after processing were sold for 50 thousand. In this case, the purity of the contract and its economic justification raise suspicions;

contracts were signed with dubious counterparties or the transaction is fictitious;

there are no necessary documents. If there is no official evidence of the transaction, the court may hold the management liable for subsidiary liability;

contracts that require approval by the board of shareholders or directors were concluded individually;

the company was insolvent, but there was no timely declaration of bankruptcy. The manager must send a corresponding notice to the arbitration court within 30 days from the moment of establishing the impossibility of settlements with counterparties.

When does subsidiary liability arise?

The most important moment in the formation of a decision on the subsidiary liability of the founder is associated with the conclusion about the intentional harm caused to the economic position of the company.

However, the court may exempt from liability for management errors and violations in accounting if they were accidental and did not contain the intent to lead the organization to bankruptcy.